Start a Business in Canada as a Foreigner: The Ultimate Guide

Interested in starting a business in Canada as a foreigner? Here is how you can Start a Business in Canada as a Foreigner.

Canada is considered one of the leading countries for starting a business. This nation boasts an ever-growing economy, political stability, and a high standard of living. All these factors elevate the country from a business perspective.

The Canadian Government has helped this economic growth by actively encouraging residents to open new businesses. This includes Canadians as well as non-Canadians. Foreign business owners, in particular, choose Canada because the country offers them multiple routes to permanent residence.

This guide will describe the different ways to start a business in Canada as a foreigner.

Three Ways to Start a Business in Canada

The three main ways to start a business in Canada are described below.

1. Expand a Business You Current Own into Canada

One of the easiest ways to start doing business in Canada is to expand your current venture into the country. So if you already have a business outside Canada, you can open an office or a subsidiary.

This method is excellent because you do not need to be a Canadian citizen or permanent resident to do this. However, you must employ a Canadian to set up your office or subsidiary in certain provinces.

2. Start a Business While Residing Outside of Canada

It is also possible for you to start a business in Canada while residing in another country. This route is practical if you want to reap the many benefits of having a business in the Canadian market but do not want to immigrate there.

The Canadian Government has encouraged such arrangements by passing the Investment Canada Act. They introduced this legislation to encourage investments toward Canada’s economic growth.

You should note that you will still need a Canadian to be involved with your business as a company director. You will also need to hire a local agent to assist you with the business incorporation process.

3. Move to Canada and Then Start a Business

The last option is to move to Canada and then start a business. This method is one of the popular ones, mainly because there are multiple ways to do this. This includes:

C11 Work Permit

Canada offers a special work permit known as the C11 work permit for entrepreneurs with high net worth and business ownership experience. Such entrepreneurs can use this work permit to enter Canada and then invest in or start a business there. The entrepreneur then becomes eligible to apply for permanent residence after operating their business for one year.

C10 Work Permit

The C10 work permit is another work permit that allows professionals to come to Canada and conduct business activities in the country. People applying for this special work permit must demonstrate that their business activities will significantly contribute to Canada’s culture, social fabric, and economy.

Intra Company Transfer Canada

The intra-company transfer program is for foreign business owners who want to expand their existing business into Canada. Business owners can also transfer employees from their home country to Canada to help run the business. People who come to Canada on a work permit under the ICT can apply for permanent residence using different pathways.

Provincial Nominee Programs (PNP)

There are also numerous provincial programs for entrepreneurs and foreign business owners who want to purchase, set up, and operate a business in Canada. Each province has unique requirements for its respective business immigration programs, so it is important to research each and learn which is most suitable for you.

Entrepreneur Work Permit (Owner-Operator LMIA)

The Owner-Operator LMIA program is a special program that allows foreigners to purchase or set up a business in Canada after being issued a work permit. The professional is then required to actively participate in operating the business. Once the business has begun operating, the candidate can apply for Canadian permanent residence.

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Starting a Business in Canada Requirements

Each program mentioned above has specific requirements for foreigners who want to start a business in Canada. However, most of them have specific requirements in common. This includes:

A Robust Business Plan

Every business immigration program requires candidates to provide a robust business plan. This plan will describe critical information on the market you intend to operate in and how you plan to set up and operate your business. The available resources to conduct these activities.

You must ensure your business plan is comprehensive because it will be used to convince immigration officers that you possess the commitment and resources to set up and operate your business successfully.

Relevant Experience

Canada’s business immigration programs require candidates to possess relevant experience before setting up their business there. Having prior business ownership experience can help you fulfil this requirement.

In some cases, you could fulfil this requirement if you have senior management experience under specific occupation codes.

Funds to Start a Business in Canada

Prospective entrepreneurs and business owners must also demonstrate they possess enough funds to set up and operate their businesses. You might wonder how much money is required to start a business in Canada. There is no set answer to this question, as the required funds will vary based on the type of business you intend to set up.

Many experts recommend having a minimum of $100,000 available for small startups. You should have a minimum of $300,000 for your setup and operations for larger businesses.

Commitment to Set Up and Operate the Business

The final requirement is demonstrating your commitment to setting up and operating your business. You can do this in many ways. For example, you can set up a sales tax account through the Canada Revenue Agency. Similarly, you can rent out your intended office space and order supply materials.

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How to Register a Business in Canada?

Simply belonging to the above categories won’t make an individual eligible for the C11 work permit. They will also need to meet the C11 Work Permit requirements described below.

Registering a business in Canada is a relatively straightforward process. The steps to do this registration are described below.

1. Choose an Appropriate Business Name

Before starting the business registration process, you must ensure you choose a unique business name. You can check this easily by looking up your intended business name in national name databases such as the Canadian Corporate Names and Trademarks Database or Canada’s Business Registries.

2. Obtain a Business Number (BN)

Next, you must obtain a business number by registering your business with the Canadian Revenue Agency. The Provincial and Federal governments will use this number to identify your business.

3. Choose Between Incorporating Your Business Federally or Provincially

You can then choose to incorporate your business federally or provincially. Federal incorporation generally costs more than provincial incorporation. However, it allows you the freedom to conduct business activities in multiple provinces.

4. Complete the Application for HST and GST

If you expect your business to have an annual turnover greater than $30,000, you will need to register it for a Goods and Services Tax (GST)/Harmonized Sales Tax (HST) account. You can also register your business for this account if your annual turnover is under $30,000. Doing so will allow you to get tax refunds for your business activities.

5. Obtain Business Licenses and Permits

You will need to obtain certain types of licenses and permits to operate your business in Canada. This includes specialized licenses if you are operating in specific industries. For example, you will require a local operating license if you intend to operate a restaurant or cafe.

Main Advantages of Starting a Business in Canada for Foreigners

Starting a business in Canada has many advantages for foreigners. This includes:

Operating in a Stable Environment

Canada is known for having a stable business and political environment. You won’t have to worry about economic or political events jeopardizing your business. Therefore, your business’s continued existence will largely depend on your efforts rather than factors out of your control.

Access to a Huge Customer Base

Canada has a relatively high standard of living, even within the developed world. Canadians have plenty of disposable income, so they are willing to spend money on various goods and services. Opening up a business in Canada gives you access to a huge customer base, so your business has a high chance of turning a sizable revenue if you offer attractive products or services.

Hiring Workers from a Highly Skilled Labour Pool

It is estimated that approximately one in three Canadians possess a Bachelor’s degree. This means there are millions of highly skilled workers in the Canadian labour pool.

This is advantageous for businesses that need to hire skilled staff for their operations. If you open a business in Canada as a foreigner, you shouldn’t have any problem finding qualified workers to run your business.

Being Able to Settle in Canada

One of the best advantages of starting your business in Canada is that it opens up the possibility of immigrating to the country. This includes immigrating through Federal programs such as Express Entry or Provincial Nominee Program.
For this reason, starting a business in Canada could be your ticket to settling there with your family.

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How Elaar Immigration Can Help?

Setting up a business in Canada offers no shortage of benefits for foreigners. If you want to set up or purchase a business in Canada and eventually move to this country, please get in touch with Elaar Immigration. Keshav Sharma, a professional with many decades of business management experience, leads our team of Regulated Canadian Immigration Consultants. Together, we can help you chart a winning business strategy that will allow you to successfully set up and operate a business in Canada.


FAQ: Start a Business in Canada as a Foreigner


What kinds of business formations are accessible in Canada to foreigners?

In Canada, foreigners are able to form corporations, partnerships, sole proprietorships, and franchises, among other business structures.

What conditions must a foreigner meet in order to launch a business in Canada?

Typical essential criteria are as follows:

– Registering the company with the relevant regional or local authority.
– Acquiring the required licences and permits, based on the type of business.
– Obeying the rules and laws pertaining to taxes in Canada.
– Opening a bank account for a business.

Does opening a business in Canada entail obtaining any particular permits or visas?

The Startup Visa Programme and Provincial Nominee Programmes (PNPs) are two options available to entrepreneurs and investors who wish to start a business in Canada. These programmes provide immigration routes based on startup or business investment. There are particular requirements and eligibility criteria for these programmes.

What kind of financial investments are required for a foreigner to launch a business in Canada?

The kind and size of the firm determine how much investment is needed. Certain provinces may have minimum investment requirements for their programmes aimed at attracting entrepreneurs.

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